Global economic losses from El Niño — the recurring climate pattern marked by unusually warm sea surface temperatures in the central and eastern tropical Pacific that can shift rainfall and disrupt harvests worldwide — could reach as much as $11 trillion, according to the International Fund for Agricultural Development (IFAD).

In its report "Food Systems Under Stress: Building Resilience from the First Mile," IFAD said small-scale farmers and rural economies are confronting simultaneous climate and economic shocks, including El Niño, water stress, and rising fertilizer prices driven by the fighting in the Middle East.

The National Oceanic and Atmospheric Administration's Centers for Environmental Information projects that a strong-to-very-strong El Niño will peak in the first quarter of 2027.

"When drought coincides with rising energy and fertilizer costs, farmers can face higher irrigation and production costs precisely when water demand is increasing and yields are under pressure," IFAD said. These pressures have already significantly reduced agricultural production in 2026.

"This report makes an important argument based on evidence from our IFAD investments: resilience is not built by investing in single interventions, but by connecting investments in inputs, markets and finance so that gains in one area are not lost in another," IFAD President Alvaro Lario said.

South and Southeast Asia are expected to sustain the greatest damage during the El Niño event. The 2015-2016 El Niño cut rice production — a key commodity in both regions and the daily staple for a large share of the world's population — by 15 million metric tons.

In the Philippines, El Niño has already caused an estimated P8.57 billion in lost agricultural production, according to a Department of Agriculture (DA) bulletin released on Oct. 21. Lost production in the rice and crop segments was valued at P2.95 billion and P5 billion, respectively. The bulletin offers a country-level measure of the damage IFAD expects to concentrate across South and Southeast Asia, and further DA tallies and NOAA outlook updates will be the checkpoints to watch as the event moves toward its projected 2027 peak.

IFAD said rural economies become more resilient when investments reach farmers, enabling them to maintain production through shocks, keep market access, and draw on finance that addresses both risks and recovery.

"When farmers receive a finance-focused intervention, such as insurance, farm-income losses are reduced by 9.8%. But when interventions are bundled across inputs, market access and finance, income losses are reduced by 18.7%, nearly twice as much," IFAD said.

The fund called on the public and private sectors to "design for interacting risks rather than individual shock."

IFAD's report was unveiled on Nov. 9 during the 31st Conference of the Parties (COP31) to the United Nations Framework Convention on Climate Change, the annual United Nations climate conference where governments negotiate collective responses to global warming, and was developed in partnership with the Turkish Ministry of Agriculture and Forestry for COP31. — Maria Mikaela H. Tormon